Ireland’s CFOs continue to prioritise cost control and efficiency over investment in AI but will they pay the price further down the road? asks Derarca Dennis
As Ireland’s Chief Financial Officers (CFOs) step up to future-proof the finance function, their role in leveraging technology to improve efficiencies is becoming increasingly pivotal.
According to the EY Ireland CFO Survey 2024, finance leaders are not just looking to elevate business performance, they are also actively seeking to tap into the potential of technology while simultaneously strengthening their collaborative alignment with Chief Technology Officers (CTOs).
The continued focus on technology investment is unsurprising, considering that 47 percent of respondents identified manual processes and controls as an area where time is used least efficiently in the finance function.
It is perplexing that such a high number of respondents continue to cite manual processes and controls as an area for improvement in the finance function. This suggests that organisations have some way to go in their automation efforts, and significant further investment in technology will be required over the coming years.
AI and the finance function
Despite the investment in technology, the survey results for artificial intelligence (AI) indicate that it is a low priority for organisations right now. Finance leaders in Ireland are still at the very early stages of Generative AI (GenAI) adoption and are firmly focused on using cost reduction and efficiency gains to realise growth.
AI use remains modest, with just 26 percent claiming to have leveraged it for enhanced efficiency, automating manual tasks and risk detection, among other use cases. The uptake of GenAI is even lower at just 15 percent.
This may come as a surprise to some. While GenAI has been commanding the headlines over the past 15 months, the technology is still not at the stage where it can be employed to carry out advanced functions in finance departments. CFOs are naturally exercising caution until they see some applications proving that GenAI can be trusted in terms of output and security.
Just six percent of respondents say they will leverage advanced AI to enhance the finance function or acquire AI skills in the next two years. The figure for a longer five-year span is only moderately higher, with nine percent saying they will integrate AI and advanced AI into the finance function in that timeframe.
The results of the survey indicate that organisations are still at the discovery and use case definition stage in relation to AI.
Automation
It is surprising that greater use has not been made of the technology for automation purposes, given the continued inefficiencies created by manual processes and controls in finance functions.
Interestingly, the survey shows a fairly significant budget increase is anticipated, albeit from a low base, for advanced AI (including GenAI) from one to 3.2 percent in the next two years. This suggests an openness to applying the technology as soon as use cases are identified and better understood.
Not all AI solutions are expensive or require custom development. To get their organisations to accelerate the AI journey, CFOs can recommend adopting pre-built AI solutions that drive cost efficiency.
Cybersecurity
In their role as strategic business partners, CFOs must do more than just comprehend the organisation’s risk tolerance; they are also responsible for steering the budget towards areas that need more attention.
Just 39 percent of the respondents in the EY Ireland survey say they have ramped up investment in security tools, compared with 60 percent in 2023. This may indicate a degree of complacency regarding cybersecurity, or it could be that investments have begun to plateau following significant increases in recent years.
In a very welcome finding, 31 percent of the respondents say they instituted a cybersecurity task force compared with the eight percent in 2023.
CFOs’ north star
The relatively low priority given to technology-driven transformation and the low rate of AI adoption in finance functions is surprising given current talent shortages. Right now, cost control and efficiency remain the north star for finance leaders in Ireland.
Derarca Denis is Assurance Partner and Sustainability Services Lead at EY Ireland
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